Zara owner Inditex is still betting on bricks and mortar

The world's biggest fashion retailer has reported staid profits for 2013, but is increasing store openings.

by Rachel Savage
Last Updated: 19 Mar 2014

Zara owner Inditex is continuing to open actual real life shops as well as expanding online. When the world’s biggest fashion retailer is still getting physical you know bricks and mortar are not over - at least for now.

The Spanish clothing giant is planning to open 450-500 new stores this year, up from 331 net shop openings in 2013. Capital expenditure will increase to €1.35bn (£1.13bn) from €1.24bn last year.

Inditex, which is owned by the world’s third wealthiest man Amancio Ortega, started selling online in Greece this month, despite the still dire economy there, and is launching web sales in Romania in April. South Koreans and Mexicans will be able to buy Zara online in the last half of this year, meaning Inditex sells on the web in 27 countries.

However, the company’s net profit was stuck at €2.4bn, the first time it hasn’t reported a rise in annual profit since in floated in 2001. The sclerotic Spanish economy, where Inditex has almost a third of its 6,340 stores, certainly isn’t helping. Bernstein Research estimate like-for-like sales in Spain have fallen an average of 2.7% a year for the last five years.

The retailer needn’t be too fashionably pouty though. Asia, where everyone from Tesco to Mulberry have struggled to tap into the rapidly expanding economies, has overtaken Spain as a proportion of Inditex’s sales, accounting for 20.4% of revenues compared to 19.7% in its home country.

Revenues also rose 12% from February 1 to March 15, whereas Swedish rival Hennes & Mauritz (H&M obvs) reported an 11% increase in February that disappointed retail watchers. Take that girlfriend.

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